Select Committee on Public Accounts Sixty-Sixth Report


14. Microsoft were one of the IT suppliers which had been involved in developing the Government Gateway Web site and were now seeking to sell the technology to other governments. Asked whether the UK government would earn commission on any sale, the Office of the e­Envoy said that it had a contractual arrangement with Microsoft whereby 22% of any gross sales of the Government Gateway technology intellectual property would come to the UK Government.[17]


15. The Department for Transport, Local Government and the Regions has allocated £350 million over the three years 2001 to 2004 to promote electronic government by the 388 English local authorities, which included developing their Internet-based services. Responsibility for local government has since transferred to the Office of the Deputy Prime Ministry. As for central departments the Government has set local authorities the target that by 2005 all of their services which can be transacted electronically should be available on­line. In promoting achievement of this target the Department has adopted the approach which the Office of the e­Envoy has applied to central government. Local authorities were asked to appoint champions to promote electronic service delivery in their organisations and prepare by April 2001 statements setting out how they intended to achieve the e­target. These statements were then reviewed by the Department. By November 2001, 97% of English local authorities had a Web site.[18]

16. Local authorities' progress in providing services on­line is being monitored using a Best Value performance indicator which requires them to count their services and those which are available electronically. Most of the services currently made available electronically by local authorities provide information and advice and few permit transactions such as paying parking fines on­line (Figure 1). Asked why only just over a quarter of local authorities let citizens pay their council tax electronically, the Office of the Deputy Prime Minister said that some 95% of council taxes were already collected through direct debit. In terms of promoting the development of more interactive services the Office said it was funding pathfinder projects which included partnerships of local authorities working on different aspects of service delivery.[19]

17. The Office of the Deputy Prime Minister considered that the main challenge was how to transfer the good practice and experience of leading edge local authorities in electronic service delivery to the rest of local government. People living in less prosperous areas or where local authorities were less advanced in developing Internet-based services might otherwise be excluded from the benefits of electronic government. There were national strategies to prevent this from happening. For example, the Department for Education and Skills and the Office of the e­Envoy had a programme to provide access to the Internet in a range of public places including through the Department for Culture, Media and Sport's library service.[20]


18. Converting and redesigning manual processes and procedures so that they can be done electronically should provide opportunities for departments to improve their operational efficiency with potential to release resources from support activities for front line service delivery. Few departments have as yet full information on the cost of completing basic administrative tasks to assist in determining the scope for efficiency savings which converting to electronic means of working should allow.[21]

19. The Comptroller and Auditor General's examination of Customs and Excise's development of electronic services provided some indication of the potential savings that should be achievable. For example, the average cost of processing a combined VAT return and cheque under current manual systems is £1.16. Private sector experience suggests that the processing of similar transactions electronically should typically cost less than 10 pence. Applying these figures to the 7 million VAT transactions which Customs and Excise process each year suggested that there would be significant savings if the Department could encourage substantial numbers of businesses to submit their VAT returns on­line. Customs and Excise also identified an average 240,000 errors each year in the submission of VAT Export Sales Lists from businesses. Each error cost £1.50 to correct (around £360,000 a year). There was therefore potential to realise savings if lower levels of error could be achieved by businesses directly inputting information via the Web.[22]

20. Customs and Excise had achieved only modest efficiency savings from moving to Internet-based services largely because take up of services by businesses had been low. It was only by persuading sufficiently large enough numbers of people and businesses to switch from sending returns in by post to doing so on­line that more labour intensive manual processing could be reduced.[23]

21. The Office of the Deputy Prime Minister was supporting a number of projects to promote improvements in value for money in local authorities. This support was mainly for authorities which were taking the lead in developing, for example, electronic procurement or electronic customer management systems. The intention was to have all purpose systems which were capable of being transferred to other authorities at a cost significantly less than if they had had to employ consultants to develop similar systems from scratch. It would be possible to point quite rapidly to areas of local government where substantial savings would be being achieved.[24]

22. The Office of the e­Envoy had not yet implemented the recommendation in our previous Report on the need to develop a methodology for justifying expenditure on Web provision. Asked how it could be confident that expenditure on implementing electronic government was delivering value for money, the Office said that the Treasury would be issuing guidelines on applying such a methodology. Before any significant sums could be spent on IT projects departments had to present a business case to the Treasury setting out the intended benefits to be achieved from the investment in IT including savings to be realised.

17   Qq 90-93 Back

18   C&AG's Report, para 3.10, 3.12, 3.19 Back

19   Ibid, para 6; Q 16 Back

20   Qq 27-28 Back

21   C&AG's Report, para 2.18 Back

22   C&AG's Report, para 2.18 Back

23   Qq 14-15, 94, 116 Back

24   Qq 27, 118 Back

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